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Argentina Not Planning Any Drastic Policy Changes, Kicillof Says

Argentina isn’t planning any drastic changes in economic policy and will continue to focus on generating employment, increasing production and making the distribution of wealth more even, Axel Kicillof said in his first press conference as economy minister.

The government will continue to negotiate with different sectors of the economy on price subsidies, Kicillof said, adding that he will announce his economic team tomorrow.

Kicillof, who as deputy economy minister helped orchestrate the nationalization of energy company YPF from Spain’s Repsol SA last year, echoed President Cristina Fernandez de Kirchner, who last night, in her first appearance since Oct. 8 surgery, said her government will deepen its economic model.

“We’re not going to do anything that generates brusque changes in the economy,” Kicillof, 42, told reporters at his ministry today. “We’re going to continue with our targets, which focus on production, employment and distribution of wealth.”

As deputy minister, Kicillof helped Fernandez tighten foreign exchange controls, limit imports and use central bank funds to finance spending and pay foreign creditors.

Kicillof said Argentina’s international reserve levels are “consistent” and “strong” and that the country needs to find ways to increase the supply of dollars while controlling the outflow of foreign currency.

Argentina’s reserves fell to $31.9 billion yesterday, the lowest in almost seven years, as the government uses them to pay the country’s international debt obligations.

Asked if he planned to create a dual currency system to encourage tourists to bring dollars to Argentina, Kicillof said the government wouldn’t do anything that jeopardizes Argentines with lower incomes.

Earlier today, Jorge Capitanich, who was sworn in as Fernandez’s new cabinet chief last night, said the government is working on measures to shore up reserves by finding new ways to attract inflows of foreign currency.

Reserves should be spent on imports that would help the economy grow rather than going on “luxuries,” Capitanich said.

“It’s much more important to have essential raw materials for the production chain than to buy a luxury car that only satisfies one person,” Capitanich said in comments broadcast on C5N television station.

To contact the reporter on this story: Charlie Devereux in Buenos Aires at cdevereux3@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

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